Kenwood 2005 Annual Report Download - page 8

In pursuit of further value creation by integrality our three core business segments
and establish “Mobile & Home Multimedia System” business
Communications
Equipment Business
Car Electronics
Business
Development of digital and networking technologies for automobiles has
opened remarkable possibilities in the fields of car audio and navigation
systems. Since its entry into the automotive electronics market 25 years ago,
the Company has built a high brand presence worldwide, utilizing the capability
to cultivate potential needs of the market and the ability to plan and develop
products, while emphasizing a consumer business based on the high fidelity
technology it has accumulated over the years. In the course of this period, the
Company has launched many innovative and sophisticated products such as the
industry’s first pull-out car audio products, encompassing anti-theft and MP3
car audio models and holds a strong brand presence worldwide.
To solidify its global presence in the car
electronics consumer (audio) business, the
Company has expanded its product lineups by
launching products such as; models which
can be linked with PC applications through an
advanced codec drive (AC Drive), the first such
design in the industry; high sound-quality
models which the Sound Meister, the pride of the Company, developed by
combining high fidelity technologies; and commercializing an item that promotes
a new way of enjoying sound, namely, an iPod connection module that enables
Kenwood’s car electronics products to be connected to Apple Computer Inc.’s
iPod. In addition, the Company has been focusing on developing new markets,
mainly in the BRICs nations, to enhance the revenue base.
In the car multimedia (consumer) business, which is a growing field, the
Company has been developing products with emphasis on the user interface
design, adopting touch-sensitive panel and voice-recognition systems earlier
than its rivals did. In recent years, we have been selling proposal-oriented
products, including an audio-visual hard disc
navigation system that focuses on
functionality and entertainment, radio tuners
for digital satellite broadcasting and the first
civilian use of tuners for terrestrial digital
broadcasting as a product to North America.
Car Multimedia Division, which became
independent of the Car Electronics Consumer Division in April 2005 and
established its own development system for car navigation systems, launched
the world’s first HDD car navigation system that is compatible with an iPod,
while focusing on the development of visual products that have been growing
globally, as well as multimedia products including products compatible with
terrestrial digital broadcasting, that are expected to become increasingly popular
in the future.
As for the car electronics OEM business, which became independent in April
2004, the Company is rapidly expanding operations globally, by taking
advantage of its advanced technologies, which are well-renowned in the
consumer business, and its ability to plan and develop products, as well as its
reliability and brand presence. In addition, the Company is increasing its
presence in components for automotive electronics, as well as car multimedia
and audio systems and is working hard to
boost business competitiveness and
profitability, by enhancing development and
production systems through proactive
investment as well as vertically integrating
plants at home and abroad.
Since its foundation, the Company has operated the radio equipment business
using the high-frequency technology, developing proprietary techniques and
high know-how in the field of wireless communications, which is not included
in the car electronics and home electronics businesses. The Company has
increased its market share of commercial wireless radio equipment, becoming
the world’s second largest supplier. To achieve this, the Company has speedily
complied not only with various countries’ laws and regulations on radio waves
but also with digitalization of radio equipment, which requires cutting-edge
technologies. The Company has supplied radio systems that require extremely
high reliability, privacy and security, durability
and operability. This can be proven by the
fact that the Company has been providing
equipment - to the Team McLaren Mercedes
of formula one (F1) auto-racing as an official
supplier for 15 years.
The Company now focuses on the
businesses of wireless radio equipment,
including primarily commercial radio systems as well as amateur radios and license-
free transceivers. In addition, the Company has expanded its business center in
the U.S., the largest market for Kenwood, where it is enhancing the cooperative
system of marketing, sales, development and production and further shifting
from being a manufacturer of terminals to becoming a system provider.
Kenwood is expanding its operations in Asia, particularly China, where
spectacular growth is forecasted, and the regions in which growth is projected,
including East Europe, particularly Russia, the Middle East, Latin America and
Africa. Meanwhile, the Company is actively carrying out a growth strategy
through strategic partnerships and M&As. As part of this strategy, the
Company acquired the wireless radio
operations of Toyo Communication
Equipment Co., Ltd. in June 2004. With this
acquisition, the Company can now supply a
large number of products to public agencies
and power utilities, as well as utilize
networks and huge resources or
technologies relating to radio equipment
operations. It is now expanding its radio equipment business in Japan.
The digitalization of the wireless transmission system has been promoted in
the commercial wireless radio field. In response to this, Kenwood has been
vigorously promoting R&D in digital wireless radio systems. For example,
Kenwood completed the development of the digital wireless radio system for
use in F1 races and produced commercial digital wireless radios in compliance
with APCO (Association of Public-Safety Communication Officials: commercial
digital wireless radios for public safety institutions such as police and fire
departments) that has already been commercialized. In February 2005,
Kenwood established of a technical alliance with Icom Inc. to engage in joint
research and development for wide-ranging
digital wireless radio systems. In the future,
Kenwood will further accelerate the
digitalization of commercial wireless radio
systems by leveraging its partnership with
Icom Inc. to ensure the second greatest
presence in the commercial wireless radio
equipment market, worldwide.
08 Three Core Businesses